Second acreage issue

The second issue surrounding acreage is the share of the total available acreage that will be planted to individual crops.

“In general, it is believed corn and soybeans will be very competitive with cotton and rice acreage in the Delta and portions of the Southeast,” Good said.

“As a result, corn and soybeans are expected to garner a larger share of the acreage pie in those areas.

“In the northern Plains states, the relevant competition will be between spring wheat, corn, soybeans, and other oilseed crops. The outcome of that competition may be mostly a function of spring weather,” he said.

Taken together, the issues Good described suggest that total corn and soybean acreage could be near the level of 2012.

Early expectations were for corn acreage to increase modestly and for soybean acreage to be almost unchanged. Changing price relationships and a more favorable spring price for soybeans for crop revenue insurance may have altered those expectations slightly.

Good said that the USDA will report the results of the spring planting survey in the Prospective Plantings report to be released on March 28.

“Intentions for corn and soybean plantings, equal to or slightly larger than those of last year, would not be a surprise,” Good said.

“Given that seeding of those crops in the Corn Belt will be later than last year’s planting, there is more opportunity for actual plantings to deviate from intentions this year. Weather conditions, planting progress, and price relationships will be monitored closely to judge potential changes,” he said.

The later planting this season is also generating some further discussion of yield potential, particularly for corn.

“As learned again last year, corn yields are mostly determined by summer weather conditions,” Good said.

“However, agronomic research clearly indicates that planting date, everything else being equal, can have some influence on yield outcome. In particular, there is an increasingly large yield penalty associated with corn planted late.

“That same research suggests that maximum yield potential is associated with corn planted in a fairly large window of time. For much of the Midwest, that optimum planting window is from about mid-April through early May with increasingly large yield penalties after mid-May.

“At this juncture, the potential for U.S. average corn and soybean yields near trend value in 2013 are still in place,” Good concluded.

“Still, the likelihood of some planting delays, along with lingering drought conditions in western areas, provides the basis for considerable yield uncertainty for corn in 2013.

“If these conditions persist, new-crop corn futures could regain some of the losses occurred since late 2012.

“For those with crop revenue insurance, pricing opportunities for both corn and soybeans should probably be judged in context of the spring crop insurance prices, with prices well above those levels representing sales opportunities,” he said.